# Liquidity

This is the central operating mechanism of a decentralized exchange such as Viralata Swap and Pancake Swap.

When participating in an LP (Liquidity Pool), you will be applying a pair of tokens/coins to enable purchases and sales in a decentralized exchange (such as PancakeSwap, Viralata Swap and others). This mechanic can be called "providing liquidity".

{% hint style="info" %}
"Provide liquidity" means adding a currency pair so that they can be used to enable the operation of decentralized exchanges.
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To understand how decentralized exchanges work and why this step is important for their operation, go to:

{% content-ref url="../../saiba-mais/formacao-de-preco/piscina-de-liquidez" %}
[piscina-de-liquidez](https://docs.viralata.finance/english-1/saiba-mais/formacao-de-preco/piscina-de-liquidez)
{% endcontent-ref %}

Providing liquidity involves choosing a pair (AURO/BUSD, for example) and adding resources in exact proportion to the current price. That is, if the value of a unit of Auro is U$0.05, when providing liquidity you will have to add exactly U$0.05 for every 1 Auro. Don't worry, the website will calculate the exact amount when adding liquidity.

{% embed url="<https://youtu.be/vX5TW2XwA8c>" %}

To learn how to provide liquidity in Viralata Swap, check the tutorial:

{% content-ref url="../../tutoriais/como-prover-liquidez" %}
[como-prover-liquidez](https://docs.viralata.finance/english-1/tutoriais/como-prover-liquidez)
{% endcontent-ref %}

As with any decentralized exchange, just providing liquidity does not guarantee rewards in AURO. After providing liquidity, it is necessary to apply the liquidity pairs to a farm:

{% content-ref url="../../tutoriais/como-participar-dos-farms" %}
[como-participar-dos-farms](https://docs.viralata.finance/english-1/tutoriais/como-participar-dos-farms)
{% endcontent-ref %}